In a recent announcement, VivoPower International revealed its strategic shift towards adopting an XRP-denominated treasury. This significant move highlights the company’s ambitions within the evolving cryptocurrency landscape. While speculation swirled around the decision, detailed insights into its rationale and future plans were shared in a comprehensive interview with industry experts.
The discussion, which lasted over 40 minutes, featured Tony Edward from Thinking Crypto interviewing Kevin Chin, Executive Chairman and CEO, alongside Adam Traidman, Chair of the Board of Advisors. They elucidated VivoPower’s unique approach and aspirations within the crypto space.
Rationale Behind Choosing XRP
Chin shared his personal connection to XRP, stating, “I first invested in XRP back in 2016.” He emphasized how the token’s ability to facilitate low-cost transfers aligns with the markets where he leads several initiatives. As VivoPower pivoted its operations, he and the board felt compelled to establish an XRP-focused treasury, stemming from both personal conviction and strategic necessity.
Traidman highlighted a notable gap in the market. “Following Michael Saylor’s achievements, many firms have begun to engage with digital assets,” he mentioned. Yet, despite the wide adoption of Bitcoin among companies, none had ventured to leverage XRP for treasury needs, which boasts considerable liquidity and a strong global presence.
Unlike firms like MicroStrategy that view Bitcoin merely as a store of value, VivoPower seeks to utilize an asset with intrinsic utility. “Working with a token that has real-world applications enhances our ability to influence its ecosystem,” Traidman stated. This proactive approach positions VivoPower in a unique segment of the market.
To implement its strategy, VivoPower plans to partner with BitGo for asset custody and over-the-counter conversions, stake a portion of its treasury on the Flare Network to generate yield, and allocate surplus funds into Ripple’s RLUSD stablecoin for international transactions. Chin announced pilot projects focusing on remittances for their operations in the Philippines, as they tackle challenges associated with traditional banking systems.
Vision for the Next Five Years
VivoPower’s corporate structure uniquely allows it to distribute yields to investors, a feature that sets it apart from typical asset management models. “Our objective includes sharing staking income as dividends,” Traidman noted, presenting a compelling incentive for investors looking to benefit from both XRP’s potential growth and its yield.
Initial funding for these ventures will stem from equity investments, particularly supported by Prince Abdulaziz of Saudi Arabia. Future borrowing may be considered, but only under favorable conditions. Chin expressed confidence in prudent financial management, recognizing the need for a strong cost-of-capital strategy.
Both Chin and Traidman confronted the realities of the crypto market’s inherent volatility. “There’s significant enthusiasm regarding treasury strategies,” Chin acknowledged but argued that price fluctuations could also present opportunities for yield generation. Their long-term perspective emphasizes planning around five-year cycles to navigate market dynamics effectively.
Traidman, who has firsthand experience with crypto innovation, pointed to the favorable regulatory climate and potential for spot-crypto ETFs as creating a robust foundation for major cryptocurrencies. “It’s evident that the risk of downturns is decreasing,” he asserted.
While remaining tight-lipped about specific upcoming projects, Chin revealed that VivoPower is evaluating various startups that are leveraging the XRP Ledger, targeting investments that promise both financial returns and enhanced utility for its treasury strategy. Consequently, the company’s subsidiaries will initiate remittance services based on RLUSD within regions like Ghana and Kenya, where liquidity challenges persist.
In sum, Chin confidently stated, “We envision ourselves thriving not just in the next five years, but well beyond that, regardless of market fluctuations,” underscoring a commitment to innovation and the development of decentralized finance solutions that generate sustainable income.
As of the latest reports, XRP was trading at $2.08.
